San Francisco Employment Law Firm Blog

Recently, one of my clients referred to me his former colleague. After having a long conversation with him, it became clear to me that he was a victim of blatant disability discrimination and retaliation for filing a workers compensation claim and for complaining about harassment because of his medical condition to the superiors of his HR manager.

There was nothing I could do to help him, however, because of the bad advice of his union representative, who told the employee that he could not file a lawsuit against the employer in court till he submitted his wrongful termination claim to Arbitration under the Collective Bargaining Agreement through a union, which he was a member of. As a result, an employee took no court action and waited till the union arbitrated his grievance. The employee contacted me shortly after he lost at the arbitration. The bad news were that our conversation took place 2 years and 1 month after his termination - a month after the statute of limitations has run on all his claims and they were all barred.

For a while I could not understand why so many employers violate basic overtime laws. After all, these laws are not rocket science, and plenty of resources are available for employer to understand and make sure that they comply with the rules of the Department of Labor Standards Enforcement when it comes to overtime compensation.

Recently, I represented an employer at a hearing in front of the labor commissioner. The employer was clearly liable for some overtime to several of his employees, and my job was mostly mitigating that liability rather than denying it. I was also curious to find out why the employer did not bother to contact me or another employer attorney before hiring workers to make sure that he pays out compensation correctly. The answer was very simple: the employer was not aware of who the overtime laws apply, didn't really care to find out, and honestly thought that the likelihood that he was going to have to deal with the issue in court was very low.

All of the above assumptions were mistakes on the part of the employer, especially the last part about the "likelihood." Having hired over 10 workers for a project of 3-month duration and having had to unexpectedly terminate the project due to some cash-flow issues, he was guaranteed to turn his hard-working employee to disgruntled workers, left without the expected earnings from the project, who will do whatever they can to obtain additional compensation after being unexpectedly terminated. Naturally, they turned to the labor board to find out if they can "squeeze" some overtime from their employer.

This was yet another example that it is well worth for the employer to seek counsel to assure compliance with the basic overtime laws, as liability for such violations is far greater than any expense of seeking legal advice to prevent such a liability.

Employers who terminate employees routinely fight the award of unemployment benefits if they feel that the employee was terminated for cause or for misconduct and should not receive unemployment compensation, which results in increasing the premium that the employer has to pay toward that insurance reserve with the State.

Fighting unemployment benefit and even winning that fight is very likely to backfire and turn out to be much more expensive than simply letting an employee collect unemployment. Many employees, when laid off or terminated, at the very least consider in the back of their mind the possibility of suing their recent employer. Whether the employee decides to aggressively pursue litigation against his former employer depends on the number of factors, but the emotional component - the anger at the employer is certainly not an insignificant element in that decision. Often, it's what makes a difference between letting things go and going after the employer in court.

Consider terminating an employee who feels that he was fired unjustly. He is hurt and angry, but at the same time thinks that it's a better idea to take a break, collect unemployment and look for another job. He applies for unemployment and gets denied benefits because the employer stated that the employee was terminated for misconduct. This very likely takes the employee over the edge and drives him to file a lawsuit for wrongful termination, harassment, discrimination, defamation, intentional infliction of emotional distress, and many other possible claims.

Whether the employer wins or loses, the company will likely spend anywhere between $20,000 and $50,000 in legal fees on defense and often much more. Thus, even if the company prevails in the wrongful termination lawsuit, the cost will be much greater than allowing the employee collect unemployment and possibly paying out a small severance in exchange for a full release of all claims, like many wise employers routinely do.